Monkey Stocks – 3 Years on

Anyone around when I announced the winner of my Monkey Stocks League Challenge?

Anyway, as promised in my 2-year update, I bring you the ‘what happened next after 3 years’ update.

Monkey Stocks?

Here’s how I came up with the idea of running my own Monkey Stocks League Challenge.

The majority of the £500 portfolios (consisting of 5 stocks each) which lined up in September 2015 were made up of stocks/shares (from FTSE 350) and were randomly picked out of a hat.

A handful of daft brave souls followed me in purchasing their random stocks for real!

The league also had a couple of portfolios chosen by experts (John K and Huw) and of course, we had M’s infamous portfolio, based on the Dogs of the FTSE strategy, which was the runaway winner of the league after both 1 and 2 years.

One Year vs Two Years vs Three Years

As a reminder, here’s how the top 10 finished after Year 1:

Here’s how the top ten (and the rest of the league) looked after Year 2:

And here are the scores on the doors after Year 3:

Zombie annihilation, with Mr Z’s Undead Monkey Fund taking the top spot, more than doubling his initial investment.

What’s in the winning portfolio?

Three not-so-great shares but the humongous gain (and dividend) from Evraz (EVR) more than made up for those losses (apparently, Roman Abramovich is a majority shareholder – only just found that out!). Of course, EVR is also one of my own Dogs of the FTSE shares…

Anyway, after one year, only 8 portfolios made gains of >10% and there were 10 portfolios showing losses.

After two years, 17 portfolios made gains of >10% (12 of them >20%) and there were only 3 portfolios showing very small losses.

After three years, again, 17 portfolios made gains of >10% (14 of them >20%), with 5 portfolios showing losses.

John K’s Pigmamig Fund was one of those which ended up in the negative after 3 years, but had this been a real portfolio, I’m sure John would have gotten rid of some/all of those stocks to minimise/avoid losses using his own investing strategy.

Still Steady Eddy

Mention must be made of diy’s Mutley’s Magic Formula fund which continued to maintain its steady process and remained in the top 10. This fund was based on Vanguard’s 60% LifeStrategy Fund, ending up with a gain of 34%. Definitely one for the passive investors and one which I will invest in myself.

Random Strategy?

Of course, as before, in no way am I recommending that randomly selecting stocks is a viable investing strategy, though I find it’s a fascinating one, which appeals to my gambling curious nature!

Did my experiment show that randomly picking shares ‘might not’ result in disaster?

It could have all gone horribly wrong, especially as you could have been unlucky and ended up picking Carillion…

Alternatively, fortune could have shone on you and you could have randomly chosen ones like this lot and celebrated seeing your investment quadruple:

Or you could get something in between and according to the experiment, that doesn’t look too bad, with the average gain being 29% over 3 years. Better than sitting 3 years in a cash ISA

Of course, we have seen the FTSE breaking records these past three years. What would  have happened if there was a big Bear market?

No More Updates

A 3-year measurement still isn’t great for a buy and hold strategy but this will be my last update for this league. Whilst the first year was fun (especially as there was a trophy at stake!), it was a complete chore getting all the dividends for the 100+ companies, plus I had to find out what happened to companies which were bought out/sold, changed names or were no longer trading.

I’m still very much interested in the random walk theory in relation to investing so I won’t rule out creating another small experimental portfolio in the future (and again with real money).  Sorry, I won’t be running another such league though – far too much effort and not nearly enough people with skin in the game!

Anyway, I hope you’ve enjoyed this experiment and if after your own research you fancy running something similar, I’d be interested to hear about it!

24 thoughts on “Monkey Stocks – 3 Years on

  1. weenie,

    I had completely forgotten about this so thanks for all the work in keeping track of all the portfolios and providing this final update at the 3 year point.

    Well done to Mr Zombie but obviously a bit of luck in selecting a big outperformer such as Evraz…is Mr Z still running the blog?

    Happy with my 8th place and 35% return with 40% bonds…a safe ‘steady Eddie’. If it was run again I would include my Scottish Mortgage in the portfolio.

    • Hi diy

      It’s been a while since Mr Z updated his blog – I hope all’s going well for him and that he’s just too busy working towards FIRE and enjoying life to work on blogging!

      If you’d had Scottish Mortgage in there, I think you would have been a lot higher than 8th place!

    • Hi Tuppenny

      Yes, with all the madness of the randomly picked stocks, I too thought it was reassuring to see how well VLS60% did. This is a fund which I intend to invest more in (only a small amount at the moment).

  2. Thanks for doing this Weenie! Really interesting to see what happened next – I love an update.

    It’s telling how the Dogs fund dropped away in the third year too.

    • Hi PWF

      Glad you enjoyed it.

      Yes, it was interesting how the Dogs fund dropped away, although if the fund was really following the Dogs strategy, some of those stocks would have been replaced by new stocks, which may (or may not) have done better. We won’t know for sure now!

    • Hey Ms ZiYou

      It was fun and yes, interesting that most of them comfortably beat the FTSE. Obviously, that doesn’t mean it’s a strategy to recommend to anyone but if people wanted to take a bit of risk with some ‘fun money’ then why not!? I’m tempted to do it again for definite!

  3. This is a cool experiment! Interesting that, after one year, ten of the funds were negative, but after three, only five were. It’s essentially “buy and hold” in action! Would be interesting to compare this to a global index tracker as well the FTSE100.

    • Hi Dr FIRE

      Yes, the experiment points positively towards a ‘buy and hold’ strategy in most cases. Comparing to a global index tracker would have been interesting, yes. Maybe one for the (distant) future!

  4. Fair play for organising all these stock leagues. Experimenting is indeed fun:- )

    It’s definitely something I would have participated in. And I would have taken the average gain of 29% over the 3 years…

    • Thanks Stefano, it was fun to take part in and although I don’t plan on doing another one soon, I may consider doing some other type of experiment! Yes, an average of 29% is indeed something most would take, I would say!

  5. I used to read Mr Zombie’s blog and was sad to see it peter out. If memory serves he pretty much reached his goals so hopefully he is enjoying the fruits of his labour. I wonder if he knows he has been crowned the final winner.

    I totally see why you are calling it a day on the updates though! Before you close the door, maybe you should also give a prize for the best named fund?

    • Hi Mrs Chai

      Yes, I too hope Mr Z is too busy living the FI life that he hasn’t got time to update his blog. I’ll continue to keep an eye on it in case he does resurface.

      Maybe I should have run a mini-comp in the first year so readers could vote for the best name! My personal favourite was the Bernie Madoff Slush Fund!

  6. Many thanks for all your hard work in updating this Weenie. It was very interesting to see how everyone has done (especially my old buys). Unfortunately I sold as soon as I had gained a little profit, in line with my entirely different portfolio strategy now I’m retired and (mostly) spending rather than investing. By the looks of it I should have held on to them a little longer. 🙂

    • Hi Corinna

      I’m glad that this experiment also unintentionally confirmed to some people (including yourself) that the Vanguard Lifestrategy funds are the way to go – thanks to @diy investor uk or I would never have included it!

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